Summary of support measures for farming businesses

Category: AgricultureCOVID-19 - Posted On: Apr 16 2020


Farming businesses will not be immune from the current economic impacts of the COVID-19 pandemic. We’ve summarised below the main support measures which have been announced so far.

Self Employed Income Support Scheme (SEISS)

Most farmers still trade as a partnership or sole trade and consequently are self-employed. The SEISS is intended to support self-employed individuals whose income has suffered because of the pandemic. It will enable eligible individuals to claim a taxable grant worth 80% of trading profits up to a maximum of £2,500 a month. It will be available for 3 months but may be extended.

The grant will be subject to Income Tax and National Insurance contributions but does not need to be repaid.

HMRC have just announced details of how they will calculate relevant income for the scheme and how the claims process will work.

Firstly, trading profits only will be considered. If an individual has more than one self-employed trade it will be the total of these. If you have traded for more than one year it will be the average of up to the last three years which will be used in the calculation. Brought forward losses will not be deducted. If one of your trading years produced a loss and the other two were profits, the net average of the three years will be calculated.

Farmers averaging adjustments will not be considered. If you have other taxable income your trading income must be more than 50% of your total income.

HMRC is aiming to contact those eligible by mid-May, with payments to be made during June.

Coronavirus Job Retention Scheme

This scheme will provide support for employers who have been unable to retain their current workforce due to coronavirus. The scheme enables employers to furlough employees and apply for a grant that covers 80% of their usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and pension contributions (up to the level of the minimum automatic enrolment employer pension contribution) on that subsidised furlough pay.

Employees must have been on the payroll at 19 March 2020 and the scheme will initially run for 3 months from 1 March. The HMRC portal for employers to claim under the scheme will be open from 20 April.

Farming businesses may have had to furlough staff, particularly in diversified enterprises, because social distancing measures could not be adhered to or because of commercial necessity. Conversely many farming businesses will be looking to recruit additional staff now and over the coming weeks to meet normal operational needs. These businesses will be able to recruit staff who have been furloughed by other employers, if that employer allows.

Business Support Grants

Businesses that pay business rates or receive the small business bonus and have suffered because of the impacts of coronavirus can claim business support grants of £10,000 or £25,000 depending on their rateable value (RV). Of course, farming businesses do not pay rates on their farm buildings, however, diversified enterprises may include buildings on which rates are assessable. If that is the case, and that enterprise has been impacted by coronavirus, business support grant eligibility should be considered.

VAT deferral

VAT returns should continue to be completed and submitted in the normal timescales. Where there is VAT to pay for a VAT period between 20 March and 30 June 2020 this can be deferred and paid later, up to 31 March 2021. No interest will be charged on the deferred payment.

Tax deferral

Self-employed individuals who have a tax payment on account to pay on or before 31 July 2020 can defer payment of this until 31 January 2021. No interest will be charged on the deferred payment.

Scottish Government measures

On 15 April the Scottish Government announced that it will bring in additional support measures to try to support those business which cannot access the measures already announced. Specifically, the new measures will target those individuals who have recently become self-employed, so did not submit a 2018/19 tax return on which to base support, businesses with multiple business premises, and those micro businesses and SME who are ineligible for the other support measures. We await details of what each aspect of this additional support will look like.

Finally (for now)…

Scottish farming businesses should note that the 15 May deadline for submitting this year’s Single Application Form (SAF) has NOT been extended. Please ensure that you get your SAF in on time.

For more information or to discuss your own circumstances, please get in touch with your usual EQ contact or a member of our EQ Agriculture team via agriculture@eqaccountants.co.uk or call 01307 474274 / 01334 654044.